Loading ...Elon Musk warns house prices are set to plunge – and says commercial real estate is in meltdown
- Brace for the intense pressure on commercial real estate to spread to house prices, Elon Musk says.
- “Commercial real estate is melting down fast. Home values next,” the tech billionaire tweeted.
- Investors are worried about real estate in a period of higher interest rates and tighter lending.
Elon is wrong. He is mixing up two different classes of real estate that do not move together as a rule. Residential property is an animal unto itself and since it represents the majority net worth of most families it has much more meaning than commercial space that is subjected to the vagueries of the market economy. What will hurt real estate is a serious recession and jobs losses. Unemployment periods do hurt housing prices just as they hurt construction trends. But even then, housing prices are really sticky on the downside. Sales can fall off a cliff but if supply is restricted home prices can remain stubbornly high. That is what we are seeing right now even with no recession happening. Lets see next year though. Tighter credit conditions, more unemployed, fewer buyers combined with some urgent selling…..maybe real estate finally takes a hit. I would not hold my breath on it though.
Agree with you Farmer. Higher rates are just freezing up the market at the same price. People aren’t selling b/c they want to keep the mortgage. They will just rent it out and rent in a new town if they have to
Right on Brother Plunger. its good to know others here are picking up the same technical vibe. Its the population influx that is doing a lot of the work of keeping prices elevated. I just heard Canada opened the door to a million people in 2022. I was utterly shocked because its double the target numbers.